Insurance penetration and insurance density, which reflects the development of the insurance sector in a country, is still very low in India. In FY 2018-19, India had an insurance penetration rate of 3.7% compared to the global average of 6%, and insurance density of just $74 compared to the global average of $682.
Many Indians are yet to fully understand what is life insurance or realise its importance. Most of them buy life insurance late in life when it becomes costly or do not take life insurance seriously, thinking it as a waste of money. Some buy insurance without much thought and have inadequate life cover.
However, life insurance is a legacy that you can leave behind for your loved ones; a financial shield that will not only protect them but also help them reach their life goals irrespective of the circumstances. To understand the importance of life insurance we need to start with the basics, such as: What is life insurance? How does it work? Why is it useful and how to calculate the right life cover for you?